Tag: DHL

India’s economy is growing, and the logistics industry is growing along with it. A new study predicts that the nation’s logistics market is expanding at a double-digit rate and will total USD125 billion by 2010.

The report by a London market analysis firm said the growth would be driven by India’s economic strength and efforts to improve its transportation and port infrastructure. The country’s gross domestic product is growing at more than 9 percent a year, and its manufacturing industries are growing at double-digit rates, the report said.

India’s logistics market currently generates an estimated USD50 billion to USD90 billion in annual revenue, but third-party logistics providers have only a small share of that market. Craig Grossgart, India manager for DHL Express, said the 3PL market in India is only about USD500 million annually. In comparison, the total 3PL market in the U.S. is about USD104 billion, according to Armstrong & Associates. A&A also puts 3PL business from global Fortune 500 companies at USD158.1 billion for 2005.

India’s 3PL market is expected to grow rapidly during the next several years. Besides economic expansion and infrastructure development, reasons include the recent repeal of the sales tax system and the increasing sophistication and reliability of logistics and e-commerce software.

India’s underdeveloped and fragmented trade and transportation infrastructure inflates the nation’s logistics costs, which are more than 13 percent of GDP, compared with less than 10 percent in nearly all of western Europe and North America.

India’s 3PL market “is still at a nascent stage” but is growing by 18 percent a year, Grossgart said. “Clearly, the Indian industry has realized the need for the services of third-party logistics, and efforts are being made in that direction.”